Diageo Case Report

The structure of the wine industry is quite different around the world. The barrier to entry is relatively higher in the New World than in the Old World. Referring to the market data on the level of concentration in 1998, people can see a few players dominate the markets in Australia and the U.S. while the level of concentration is quite low in Europe. Therefore, the rivalry in Old World is intense there.

The premium wine segment is quite concentrated with high barriers to entry making mergers and acquisitions a strong and prevalent growth strategy. With industry analysts forecasting the demand for premium wine to grow at 8% to 10% per year, many former non-rivals are now becoming a threat. Jug wine producers are entering the premium market and beer and spirit producers

Diageo plc is a British multinational alcoholic beverage company that produces and distributes alcoholic and non-alcoholic beverages. The company headquarter located in London, UK with a revenue base of 15.64 Billion (GBP) and 30,400 workforce worldwide. As a custodian of the most world iconic drinks, its brands include: Malta Guinness, Black Label, Smirnoff, Johnnie walker, Captain Morgan, Windsor, JB, Cîroc and Baileys just to mention but a few. The world’s largest distiller of malting, brewing until it was overhauled by China’s Kweichow Moutai in 2017. The name of its chief Executive officer is Ivan Menezes and its president (Deirde Mahlan).

The buyer’s power within the wine industry varies between different places in the world. There are for example strategic differences between Europe and the “New World”. The “New World” includes countries like the US, Australia, Chile and South Africa. In Europe there is a big competition

The understanding of the goal to be envisioned at Seagram moving forward is to become, remain, and develop an outside reputation as the top beverage company with 15% growth each year (Jick & Peiperl, 2011). The vision must effectively be passed to the 200 senior managers to make it a shared goal to be given and embraced company wide. The hope is that the top managed beverage company will be efficient and customer-centered, recognizing employees, while not micro-managing. The old model, based on decades old vision, needs to be replaced with a quasi-tried vision that has helped Seagram remain as one of the top, well-known companies. The new vision has seen success and is moving the company alongvtowards being the top managed beverage company. There are yet and still steps that will provide some right now actions that may help Seagram reach this goal of being the top managed company in the near future.

Bonny Doon currently has an enviable position in the 1990’s Californian wine-producing industry. The company has successfully differentiated itself from its competition and achieved a first mover advantage in terms of selling “undervalued” wines. However, due to increased rivalry and a changing and increasingly challenging market,

In the wine industry, the companies are faced with a vast variety of substitute. Basically any alcohol beverages from beer to champagne are a threat of substitutes. Depending on consumers taste wine can

Recent launches have focused on the consumers' desire for luxury, the tastes and increasing affluence of the emerging middle class consumer and increasing the accessibility of spirits through flavour extensions and new packaging and drink formats. Diageo has strong routes to market which leverage local expertise. Diageo owns and controls the route to market in many countries, and in others the route to market is through joint ventures, associates and third party distributors. The recent acquisitions in the new high growth markets have helped to enhance Diageo's routes to market with the addition of the leading spirits company in Turkey, Mey İçk, Meta Abo, Ypióca; and with investments in a premium local spirit company in China, Shuijingfang, the leading branded spirit company in Vietnam, Halico and the leading beverage alcohol producer in

This industry has seen very limited growth since 1986. Based on Exhibit 4 (C-271, the total wine consumption in the US) and Exhibit 5 (C-271, per capita wine consumption in the US) the wine industry is in the maturity stage. It could

Diageo holds a title of being the globe’s largest producer of whisky, connected to some 29 distilleries and warehouses storing seven million casks of maturing spirits. Their products are sold in more than 180 countries and the company holds offices in 80 countries. Diageo’s best-selling brand (Johnnie Walker) has been sold in the fiscal year of 2011 in an astonishing amount of 17.8 million “nine-liter cases”, which were mainly traded overseas.

Diageo, one of the world’s leading consumer goods companies, was formed from the merger of GrandMet and Guinness. In 2000, the company announced its intention to sell its packaged food subsidiary, Pillsbury, and 20% of its Burger King subsidiary. Because of the restructuring opportunity, the company wanted to rethink its financing mix.

In the most recent years, domestic sales of wine has declined constantly. The wine consumption is becoming more occasional. This is partially due to an aggressive anti-alcohol campaign and driving restrictions set by the local government, but also facilitated by a lack of marketing strategy: the wine market is loosing touch with the youth (the average age of wine drinker is gone up from 35 to 55) and young people are getting more keen to beer or alcohol pops.

This case describes the global development of wine industry, and how new world wine players occupied the global market share from old world wine producer gradually. It is very interesting that author selected the Britain as the sample stage for the battle between the new world wine campaign and the traditional campaign.

Diageo is the world’s leading premium drinks company. It has more category leading brands than any other drinks company and market leadership in many of the major growth markets around the world. Diageo’s unique STP strategy has allowed it develop into a globally renowned brand with an operating profit of over £2 billion in 2005. With its headquarters in London, Diageo has experienced rapid expansion with over 80 offices worldwide employing around 20,000 workers. The firm’s recent success can be largely attributed to its efficient market segmentation and product diversification that have allowed it to meet the specific demands of its global consumer base.

Diageo’s key ambition is to build one of the leading performing, most trusted and respected consumer products companies worldwide, which is currently been met due to mergers and acquisition. Diageo's main strategy is to drive top line growth and margin expansion in a sustainable and responsible way and to bring reliable value creation for its shareholders in the long term. Diageo will use its broad brand range to do this. They are category depth and geographic reach to deliver on consumer needs. Key to achieving its strategy is the expertise of its people who share the same values.